“Nobody knew that health care could be so complicated.” — President Donald Trump I was shocked by the quote above from our president, who made this statement in February 2017, soon after being inaugurated. As you all know, this statement was followed by six months of political debate over the repeal and replacement of Obamacare, also […]
“Nobody knew that health care could be so complicated.” — President Donald Trump
I was shocked by the quote above from our president, who made this statement in February 2017, soon after being inaugurated. As you all know, this statement was followed by six months of political debate over the repeal and replacement of Obamacare, also known as the Affordable Care Act. Contrary to the president’s statement, virtually anyone that has any connection to the U.S. health-care system knows that it is extraordinarily complicated. Medical professionals, health-system employees, patients, suppliers, vendors, and the majority of the citizenry would clearly disagree with the president’s statement that “nobody knew.”
This past six months, I have debated with myself whether a column related to health-care reform would be of value. After considerable thought and reflection, I realized that the following column, originally published in the Rochester Business Journal in January 2005, was as relevant today as it was then. As you read the following, it will be clear that the health-care debate has been a subject in political football since the enactment of the Medicare and Medicaid programs in 1965. As you read, remember that I did not have to change one word of what I published in the column some 12 years ago.
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January 2005 column
Our health-care cost crisis is of our own making. Before launching into my health-care solutions agenda, please be advised that my opinions are predicated on a foundation of irrefutable assumptions.
• All people are created equal
• No human being is immortal
• We live in a capitalist, not socialist, economy
• Every individual has a right to access health-care services
• Socioeconomic factors create inequality in wealth distribution
• Health-care cost is of legitimate concern
• The vocal majority rules in health-care decision-making
• There is no such thing as unanimous support for health-care policy decisions
With these baseline assumptions, allow me to articulate a 10-point program for improving the cost-effectiveness of our community’s health-care system. Even though I must admit a fiscal bias due to my profession, the quality of health care is of equal importance in addressing these potential solutions. Also, I never intend to run for political office, and these opinions will ensure that I could never be elected.
With all due respect to myriad interest groups and health-care lobbies, here is Archibald’s Top 10 list, in David Letterman format, with no humor intended:
10. Controllable behaviors that negatively impact an individual’s health should be reflected as an increased cost in insurance premiums. If I smoke two packs a day, I should pay more. Abuse of controllable behaviors costs more in life and automobile insurance, why not health care? Tobacco and alcohol companies, beware.
9. Tort reform and caps on personal injury, pain and suffering awards are a legislative requirement. Maine took the first step in what I hope will be a trend in limiting awards in the litigation area. One of the platform issues of the new administration that I agree with is tort reform.
8. Successful reform of the health-care legal system should allow providers to immediately reduce costs associated with defensive medicine. The costs of unnecessary visits, tests, and procedures ordered by service providers to reduce the potential risk of litigation total billions of dollars each year. And malpractice-insurance-premium decreases will be an ancillary benefit.
7. Reintroduce the consumer’s wallet into health-care access and decision-making. If an individual wants to access health-care services, there should be a direct cost to the consumer, subject to income limitations. The recent adoption of health-savings accounts as an incentive for employers and employees to take control of escalating health-care costs is a paradigm shift in our government’s attitude towards health care. Health-care costs are virtually invisible to consumers, and a Wegmans vs. Tops price comparison would certainly affect costs. If you want proof, look at the declining cost trends for Lasik surgery procedures.
6. Reduce the level of administrative and regulatory compliance costs in health care. Depending upon the study, costs in these areas consume up to 26 percent of every health-care dollar. The potential savings are enormous.
5. Technology advancement is wonderful and our nation’s research industry is the finest in the world. However, technology advances frequently increase costs through obsolescence of existing equipment and the incremental cost to providers of adding the new technology. This area may be one of the most difficult to address since any control mechanism that limits new technology must be balanced with appropriate incentives for research initiatives.
4. Controls over the drug manufacturers and pharmaceutical suppliers must be established. The efficacy of drug therapies must be assessed. Blatant and excessive advertising by the pharmaceutical industry to a public that is largely not responsible for the drug cost must be reined in. The final three items on my list are the most controversial of all. If I haven’t lost your vote yet, I am confident that the “Big Three” will push you to pull another lever.
3. Health-care capacity must be addressed through a local community effort. The debate is not about either competition or cooperation but, as Deion Sanders once said, “I want both.” Health-care delivery in this country is largely controlled by local communities. Competition among service providers is an essential element of health-care cost and quality in every community. Leadership without bias is a necessity for success in this area.
2. Establishing standards for patients’ expectations of their right to access health care, both basic and advanced, is a necessity. The research discoveries on the near horizon from genetic mapping will create new opportunities and make obsolete existing equipment and facilities. Bioethical debate must address the essential question of, “Who is entitled to what and at what cost?”
1. End-of-life care must be addressed. We are making progress in this area with health-care proxies, palliative-care initiatives, and other planning processes. However, it’s staggering to know that the majority of your lifetime health-care costs will be spent in the last year of your life.
Health-care spending is approaching 15 percent of our gross domestic product. The baby boom generation, of which I am a proud member, is beginning to retire. The health-care issues we face as a community and a country are overwhelming.
As CEO of Excellus, the dominant insurer in our community, David Klein’s piece in the Dec. 19, 2004, edition of the daily newspaper was of interest. He stated: “A healthier community is fostered when its business leaders, physicians and other health service providers are included in the dialogue and when these professionals work in an environment that has its major health service and financing organizations working more cooperatively and with a focus on community benefit.” While this quote is a mouthful of words, action in support of this philosophy is what is needed.
Each of us must look in the mirror. A realistic assessment of our mortality and myriad issues that must be addressed is imperative. True innovation and industry reform can be a reality in health care.
Ignoring the debate and compromise necessary will only make matters worse.
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The only modification to the 2005 column is that health-care costs now represent 18 percent of our gross domestic product. It is truly fascinating to me how little has been accomplished in the past 12 years. We can only hope that the future will bring rational reforms that address each of the major issues discussed in my 2005 column.
Gerald J. Archibald, CPA, is a partner in charge of the management advisory services at The Bonadio Group. Contact him at (585) 381-1000, or email: garchibald@bonadio.com